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Olympic fever!

Euphoria erupted over Rio de Janeiro’s selection as the site of the 2016 Olympic games, despite the conviction of the planning committee's chief. The university entrance exam is cancelled. President Manuel Zelaya’s stay at the Brazilian embassy in Honduras appears headed for a peaceful dénouement. Santander’s IPO in Brazil is the biggest in 2009. The BRICs gain some power at the IMF and World Bank. And French fighter jets crash right as Brazil is deciding whether to buy them.

 Top news: The Olympics are coming to Brazil in 2016. Last Friday afternoon, an already-festive crowd of 30,000 gathered on Copacabana Beach erupted as the International Olympic Committee president Jacques Rogge flipped over a card that read “Rio de Janeiro” (which he read with a somewhat Spanish pronunciation, but that’s neither here nor there). A technically-convincing proposal and the wheeling, dealing and presentation skills of President Luiz Inacio Lula da Silva were each given partial credit for wooing the committee.


Unbridled joy soon gave way to an undercurrent of concern, as the more pessimistic in Rio and across Brazil worried about a wave of corruption and inefficiency that could accompany the seven years leading up to the Games. In perhaps a sign of things to come, Rio mayor Eduardo Paes vigorously defended leaving Ministry of Sports official Ricardo Leyser at the head of the planning committee, although he has been convicted by the Brazilian Court of Audit of “irregularities” in spending for the 2007 Pan-American Games in Rio and ordered to return over $9 million. The ministry has denied the charges; Leyser is appealing.


The drama surrounding the Olympic decision split headlines with an issue of more immediate concern to graduating high school students across Brazil: the last minute cancellation of the Oct. 2-3 ENEM, a national exam that serves to measure high school performance and plays a role in the college admissions process, a sort of SAT, GED and college application all in one. Copies of the test were offered for sale to several newspapers, and when it became clear security had been breached, the Ministry of Education cancelled the exam.  It has since been rescheduled for December 5-6, and five people have been charged by the Federal Police. Students protested; some prominent universities announced today that they would not include results of the exam in their admissions formulas.


In Honduras, deposed President Manuel Zelaya is still holed up at the Brazilian consulate, but officials from the Organization of American States are arriving today, and both sides have made statements that make it appear a negotiated solution that would return him to the presidency (although with limited power) is possible. It appears Brazil has avoided the worst of possible outcomes, a standoff and possible invasion of the embassy by Honduran forces. Brazil seems to have successfully convinced the world that it did not know about Zelaya’s plan to return to Honduras until he asked for refuge at the embassy – or at least has managed to bury the issue.


And Jose Antonio Toffoli, Lula’s controversially young and partisan nominee for the Brazil’s Supreme Federal Court, was overwhelming approved by the Senate.


Money: The results for Santander’s initial public offering are in, and as most had predicted, it is the biggest IPO in the world this year, raising over $8 billion for the Spanish bank’s Brazilian subsidiary, according to the Financial Times. Santander’s Brazilian operations make it the fourth-largest bank in Brazil.


At the G-20 summit in Pittsburgh last week, the BRIC nations pushed for 7% of the IMF’s voting power to be moved to emerging economies from developed ones, but settled for 5%, which Lula stilled called an “extraordinary victory.”  The move was backed at the IMF’s meeting in Istanbul this past weekend. The leaders also agreed to shift 3% of World Bank quotas to the emerging powers, half of what the BRIC countries had proposed.


More numbers came out on social class mobility in Brazil, this time from the Getulio Vargas Foundation. Classes A, B and C (the upper and middle classes), which had grown 25.7% between July 2007 and July 2008 during Brazil’s economic boom, grew only 1.8% between July 2008 and July 2009. And the National Index of Consumer Expectations grew 4.7% in the third quarter and had virtually caught up to pre-crisis levels last September.


And the Brazilian real continues to gain against the dollar, which has suffered several year-long lows over the last few weeks and is now valued at just over R$1.75.


Elsewhere: Folha de Sao Paulo revealed that the government is not tracking school attendance records of almost a quarter of the adolescents whose families receive income transfers via the Bolsa Familia. That’s the widely praised federal program responsible for pulling huge numbers of families out of extreme poverty with monthly allowances ranging from about $40 to about $115, depending on the number of children in the family. Seventy-five percent school attendance is required to receive the supplemental money given for each child.


In an unfortunate incident with unfortunate timing, at least for the French, two Rafale fighter jets apparently collided and crashed into the Mediterranean off the coast of southwest France on Sept. 24. One pilot was rescued; the other’s body was recovered from the wreckage of the jet. The crash came in the midst of Brazil’s very public decision-making process over whether to buy the French jets or to opt for American or Swedish options. French and Brazilian officials said the crash would not affect the decision making process, although they may have been crossing their fingers behind their back.